Breaking into a career in venture capital, even with an MBA, isn’t necessarily easy. It’s something that many MBAs are interested in achieving, but that few MBAs have the support to make possible. And that’s why the MBA Venture Fellows Program at Georgetown University’s McDonough School of Business is so interesting.
The program is a collaboration between the MBA program and the Georgetown Entrepreneurship Initiative, and it provides full-time students interested in a career in venture capital with a year-long position at a local VC firm. It replaces the summer internship component for a typical MBA to focus solely on experience within venture capital.
The program begins early in the spring semester when students start applying for positions and interviewing with VC firms. If selected, the MBA works 10 hours a week throughout the semester, and then the apprenticeship becomes a full-time internship over the summer before returning to shorter hours again in the fall. It officially concludes in December, after which time many students have been asked to stay on until graduation.
To learn more about the program and what else McDonough offers its MBAs interested in venture capital, we spoke with Jeff Reid, the founding director of the Georgetown Entrepreneurship Initiative.
Clear Admit: Why did Georgetown decide to start the MBA Venture Fellows Program?
Jeff Reid: It was a mix of several factors. Our students are definitely interested in venture capital (VC); it’s a popular career choice. But it’s really hard to get a job in VC right out of school. There aren’t a lot of jobs in VC, and when firms do hire, they rarely hire someone who doesn’t have experience in the industry.
We also talked to a lot of venture capitalists before we started the program. Being in D.C., we’re fortunate to have a lot of really good firms nearby. And as I talked to the firms about their interest in working with students, and I talked to our students about their interest in working with these firms, this kind of program came together to match the interests of both sides.
CA: What else does Georgetown offer for potential VCs?
JR: Lots of our courses touch on venture capital, but we have a couple that have a very strong focus on VC, which I recommend to any student thinking about pursuing a career in VC. One is our Entrepreneurial Finance and Venture Capital course that we’ve offered for many years. The second is the Seed Investment Practicum, which has been offered for the past two to three years and has become a favorite class.
A very experienced entrepreneur and investor named James Hunt, who is starting his own VC firm after having been an angel investor for many years, teaches the Practicum. In the class, Hunt teaches students to do the work of a venture capitalist. They look at companies; they evaluate them. Over the period of the class, they narrow down a field of more than 20 companies to just the top two. Then, they choose the best company, based on what they learned in the class about how to do due diligence and what makes a good investment. From there, the professor actually writes a check and invests in the company.
It’s not just a class. Real money is involved. And the learning in that class is valuable long term because the professor encourages the students. He says, “Hey, you’ve worked on this company for a while, you’ve evaluated their ability to succeed as an entrepreneur. Now, follow them over the life of the company and see if your assumptions prove out. I can’t give you a grade for what happens a few years from now, but that’s where a lot of the learning happens.”
The fact that real money is involved and that it’s taught by a real investor really helps the students gain deeper knowledge.
CA: What should an MBA do for their best chance of participating in the Venture Fellows Program?
JR: The first thing that anyone interested in venture capital should do is participate in the Venture Capital Investment Competition (VCIC) It’s a program that schools all over the world participate in. In the competition, students play the role of a venture capitalist over a very short period—usually just a few days—and during this time they evaluate real companies, make investment decisions, interview entrepreneurs, come up with term sheets and negotiate the terms.
And McDonough runs an internal version of the competition that is available to all of our MBAs. We usually have more than 50 students participate every year, and it is the best learning opportunity to understand venture capital and to prepare yourself for the Venture Fellows Program.
We don’t pick the students for the Venture Fellows Program; the companies pick the students. But, one thing we encourage students to do is to understand the difference between the different venture firms. A lot of our students will apply to multiple firms, and one way to stand out is to really understand why that firm is different from all the others. Every VC firm has different characteristics, a different investment profile, a different investment thesis, different stages, technology interests, all that sort of stuff. And a student who understands why that firm is different and then can articulate how they can add value that is going to help that firm is going to be more successful. A lot of students recognize that there’s a lot of difference between the firms, and to understand how you can really add value to each firm is important.
Students can also read up on the industry. The best thing is to practice. Look at real startup companies, and do your own analysis. Think about which ones you would want to invest in if you were an investor. And pay attention to the trends in the marketplace.
CA: Can you talk about a recent venture capital competition where Georgetown MBAs performed well?
JR: Every year, the VCIC competition includes the 70 best business schools in the world. And three out of the last five years, Georgetown has placed in the top three including two global championships. That’s a testament to the quality of the students we have here. Second, it’s a testament to the different opportunities we provide students to learn about venture capital.
One key thing I would like to add is that a lot of our students get involved in the InSITE Fellows Program. InSITE Fellows is a student-run effort where MBAs and other graduate students do consulting projects for real startup companies. The goal of the project is to help that company raise venture capital. In that program, students are helping companies raise investment money, which lets them dip their toe in the fundraising process and the venture capital world. In that process students also get to connect with real investors who like to see the final projects and sometimes consider investing.
The InSITE Fellows Program is something available to students starting their first semester. And many of our students will participate the entire time they’re in school.
